EXHIBIT 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT ("Agreement") is entered into as of
May 9, 2002 between Trans-Century Resources, Inc., a Delaware corporation (the
"Company"), and Xxxx X. Xxxxxxxxx ("Executive").
1. EMPLOYMENT.
(a) The Company hereby employs Executive, and Executive hereby
accepts employment with the Company, on the terms set forth in this Agreement.
This Agreement shall be for an initial term commencing on the date of the
initial closing of the sale of the Company's Common Stock to the public pursuant
to the Registration Statement on Form SB-2 filed with the Securities and
Exchange Commission on or about May ___, 2002 and ending December 31, 2003. This
Agreement may be renewed for successive terms of one year each upon the mutual
agreement of Executive and the Company made prior to the end of the current
term.
(b) Executive is hereby employed to serve as the Company's
Chief Executive Officer and President. Executive shall provide senior management
services and shall perform such duties relating thereto as may be determined and
assigned to Executive from time to time by the Company's Board of Directors, to
whom Executive shall report.
(c) During the term of this Agreement, Executive shall devote
her best efforts, knowledge and skill and shall devote substantially all of her
working time and attention to the performance of her duties as aforesaid, except
during such periods as Executive shall be ill, disabled, or on vacation as
provided for by this Agreement.
(d) Executive agrees that, at the request of the Company's
Board of Directors, Executive will also perform services under this Agreement on
behalf of the Company for the Company's direct and indirect subsidiaries of a
nature and scope comparable to the services required of Executive by this
Agreement, including holding such directorships and offices of the Company's
direct and indirect subsidiaries to which Executive may be appointed.
2. PLACE OF EMPLOYMENT. Executive shall be afforded an office and
support services commensurate with Executive's position as President of the
Company.
3. COMPENSATION. The Company shall initially pay Executive as
compensation for services hereunder a base salary at the annualized rate of
$150,000 (the "Base Salary"). Such Base Salary shall be paid periodically in
accordance with the Company's payroll practices, and shall be reviewed
consistent with the Company's salary review cycle but in any event no less
frequently than annually. Unless otherwise specified herein, the Company shall
make such deductions, withholdings and other payments from all sums payable to
Executive pursuant to this Agreement that Executive requests or that are
required by law for taxes and other charges. The payment of any bonus shall be
in the discretion of the Company.
4. VACATION. Executive shall be entitled to four weeks of paid
vacation during each calendar year.
5. BENEFITS. The Company agrees that Executive shall be entitled to
participate in all executive employee benefit plans and perquisites maintained
or provided by the Company. In particular, and not by way of limitation of the
foregoing, the Company shall (a) provide Executive with health and disability
insurance commensurate with Executive's position as Chief Executive Officer and
President of the Company, (b) provide Executive with life insurance, in an
amount of approximately 2.5 times the annual salary, the proceeds of which shall
be payable to Executive's estate or to such beneficiaries as Executive may
designate (it being agreed that if this Agreement shall terminate for any reason
Executive shall have the right to maintain or convert said insurance policy and
to thereafter make all required payments thereon).
6. EXPENSES. The Company shall pay for or reimburse Executive in
accordance with the Company's standard policies for reimbursement of expenses
incurred by its executive officers for all expenses incurred by Executive in
performing Executive's services and carrying out Executive's duties pursuant to
this Agreement.
7. TERMINATION.
(a) TERMINATION IN GENERAL. This Agreement may be terminated
prior to the expiration of the initial term or any renewal term hereof as
follows:
(i) by the Company upon a determination by the
Board of Directors of the Company that Cause (as defined below) exists to
terminate the Agreement; or
(ii) by Executive with Good Reason (as defined
below); or
(iii) by the Company upon a determination by the
Board of Directors of Executive's Disability (as defined below); or
(iv) upon the death of Executive.
(b) PAYMENTS UPON TERMINATION.
(i) If Executive is terminated for Cause, then
Executive shall not be entitled to receive severance or other benefits;
provided, however, the Company shall pay Executive her then Base Salary
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compensation, then due and payable through the date of such termination, and any
unused accrued vacation through, and any unpaid reimbursable expenses
outstanding as of, the date of termination.
(ii) If the Company terminates Executive's employment
other than for Cause or if Executive terminates her employment with Good Reason,
then Executive shall be entitled to receive from the Company a lump sum
severance payment in an amount equal to one year's then current Base Salary of
Executive; provided, however, that if Executive terminates employment for Good
Reason upon a reduction in her salary, then such severance amount shall be
calculated using Executive's Base Salary prior to the salary reduction(s)
triggering Good Reason. The Company shall also provide Executive with health
benefits equal to and under the same terms as such benefits were provided to
Executive immediately prior to termination, or pay premiums for such benefits
required of Executive under COBRA, 29 U.S.C. ss. 1161, et seq. (hereinafter
"Benefit Continuation"), for a period of three (3) months or until Executive
receives comparable benefits from any other source, whichever occurs first.
Nothing contained herein shall interfere with Executive's right to purchase
continuation coverage under COBRA. Following the Company's payment of the
severance payment and Benefit Continuation, Executive's rights under the
Agreement shall immediately terminate; provided, however, Executive shall also
be entitled to receive any unused accrued vacation and any previously earned and
unpaid Base Salary, through, and any unpaid reimbursable expenses outstanding as
of the date of the termination. In addition, the Company shall provide Executive
with such other benefits as the Company then provides in accordance with its
then effective outplacement plan to similarly situated Executives of the Company
upon termination.
(iii) If Executive's employment with the Company
terminates as a result of death or disability, then Executive or her
beneficiaries shall not be entitled to receive severance or other benefits,
except for those, if any, as may then be established and applicable under the
Company's severance and benefits plans and policies existing at the time of such
termination. In such case, the Company shall pay Executive or her beneficiaries
any previously earned and unpaid through, Base Salary, any unused accrued
vacation through, and any unpaid reimbursable expenses outstanding as of, the
date of termination. Any benefits to which Executive or her beneficiaries may be
entitled under any applicable plans and programs in which Executive participated
as an employee of the Company, shall be determined as of the date of termination
in accordance with the terms of such plans and programs.
(iv) If Executive's employment with the Company
terminates upon a Change in Control of the Company (as defined below) then
Executive shall be entitled to receive from the Company a lump sum severance
payment in an amount equal to two year's then current Base Salary of Executive.
The Company shall also provide Executive with Benefit Continuation for a period
of three (3) months or until Executive receives comparable benefits from any
other source, whichever occurs first. Following the Company's payment of the
severance Payment and Benefit Continuation, Executive's rights under the
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Agreement shall immediately terminate, provided, however, Executive shall also
be entitled to receive any unused accrued vacation and any previously earned and
unpaid Base Salary, through, and any unpaid reimbursable expenses outstanding as
of the date of the termination. In addition, the Company shall provide Executive
with such other benefits as the Company then provides in accordance with its
then effective outplacement plan to similarly situated Executives of the Company
upon termination.
(b) DEFINITION OF CAUSE. For purposes of this Agreement, the
term "Cause" is defined as any one or more of the following occurrences:
(i) the failure of Executive to render services
to the Company in accordance with the Company's assigned duties, as described
herein, if such failure to render services to the Company remains uncured for a
period of thirty (30) business days following delivery of notice by the Company
to Executive identifying the basis of such failure;
(ii) the conviction of Executive of a felony under
the laws of the United States or any State thereof or any similar conviction
under the laws of a foreign country;
(iii) the commission of an act of fraud or
embezzlement;
(iv) the commission of an act of gross misconduct or
gross negligence which results or might reasonably be expected to result in a
loss, damage or injury to the Company;
(v) any act by Executive in violation of the
"Business Practices Policy" or the "Employees' Outside Business Interests
Policy" attached as Exhibit A and Exhibit B hereto, respectively;
(vi) any material breach by Executive of the terms of
this Agreement or the provisions of the Company's
general employment policies, which breach remains uncured for a period of thirty
(30) business days following delivery of notice by the Company to Executive of
such breach; provided, that, such cure period shall not be required for a breach
which by its nature cannot be cured; or
(vii) Executive's commencement of employment with
another employer while she is an employee of the
Company without the express prior written consent of the Company.
(c) DEFINITION OF CHANGE IN CONTROL. For purposes of this
Agreement, the term "Change in Control" shall mean any transaction or series of
transactions which result in a person or affiliated group of people obtaining
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ownership or control of fifty percent or more of the voting securities of the
Company or the election of a majority of the Board of Directors who were not
part of the management nominated slate of directors.
(d) DEFINITION OF GOOD REASON. For purposes of this Agreement,
the term "Good Reason" is defined as any one or more of the following
occurrences that remains uncured for ten (10) business days following delivery
of notice to the Company identifying the specific grounds for such "Good
Reason":
(i) a reduction in Executive's Base Salary of twenty
percent (20%) or more without the prior consent of Executive (other than any
base salary reduction, not specifically directed at Executive, that is
implemented generally with respect to similarly situated employees of the
Company); or
(ii) a material reduction in benefits that are
otherwise offered to similarly situated employees of the Company generally
(other than any material reduction in benefits that is attributable to Executive
or any third party provider of benefits or any material reduction in benefits,
not specifically directed at Executive, that is implemented generally with
respect to similarly situated employees of the Company); or
(iii) a materially adverse reduction in Executive's
duties or responsibilities not agreed to by Executive; or
(iv) a relocation of Executive's place of employment
to a location more than fifty (50) miles from Executive's place of employment
prior to the relocation without the consent of Executive; provided, however that
reasonable travel in the course of performing Executive's duties and
responsibilities under this Agreement shall not constitute "Good Reason."
(e) DEFINITION OF DISABILITY. For purposes of this Agreement,
the term "Disability" means the inability of Executive to perform substantially
all of the duties required of Executive by this Agreement by reason of physical
or mental incapacity for a period of six consecutive months, or a period of more
than 270 days in the aggregate in any eighteen-month period.
8. COMPETITION; CONFIDENTIALITY.
(a) Executive shall not, directly or indirectly:
(i) during the term of this Agreement engage or be
interested, whether as owner, partner, consultant, employee, agent or otherwise,
in any business, activity or enterprise which is in competition with the
Company's business, or
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(ii) neither during the term of this Agreement or
thereafter, except on behalf of the Company in the regular course of the
Company's business, use, divulge, furnish or make accessible to any third person
or organization any confidential or proprietary information concerning the
Company or its business, except to the extent required by law, and provided that
information now or hereafter in the public domain shall not be deemed
confidential or proprietary information.
(b) Executive acknowledges that inasmuch as the Company will
suffer immediate and irreparable harm in the event she breaches any of her
obligations under this Agreement and inasmuch as the Company will not have an
adequate remedy at law, the Company will, in addition to any other remedy
available at law or in equity, be entitled to temporary, preliminary and
permanent injunctive relief and a decree for specific performance of the terms
and provisions of this Agreement in the event of Executive's breach or
threatened or attempted breach hereof, without the necessity of showing any
actual damage or posting bond or furnishing other security.
9. NOTICES. Any notice or other communication required or permitted
to be given hereunder shall be in writing and shall be deemed to have been duly
given (a) when personally delivered, (b) on the business day following deposit
of such notice with a reputable overnight courier service, or (c) sent by
certified mail, return receipt requested, postage prepaid, as follows:
If to the Company:
Chairman of the Board of Directors
Trans-Century Resources, Inc
Westpark III- Xxxxx 000
0000 X. Xxxxx
Xxxxxx, XX 00000
If to Executive:
Xxxx X. Xxxxxxxxx
Trans-Century
Westpark III- Suite 200
8140 N. Mopac
Austin, TX 78759
Either party may change such party's address for the purpose
of this Section 9 by written notice similarly given.
10. SEVERABILITY. If any provision of this Agreement shall be held to
be invalid or unenforceable, such provision shall be construed and enforced to
the extent possible as if it had been more narrowly drawn so as not to be
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invalid or unenforceable, and such invalidity or unenforceability shall not
affect or render invalid or unenforceable any other provision of this Agreement.
11. ENTIRE AGREEMENT. This Agreement sets forth the parties' final and
entire agreement, and supersedes any and all prior understandings, with respect
to the subject matter hereof.
12. ASSIGNMENT; RATIFICATION OF AGREEMENT. No right or obligation
under this Agreement may be assigned or delegated by either the Company or
Executive without the prior written consent of the other party, and any
purported assignment or delegation of any such right or obligation without such
consent shall be null and void.
13. INDEMNIFICATION. The Company shall indemnify and defend Executive
and hold Executive harmless to the maximum extent permitted by law against
claims, judgments, fines, amounts paid in settlement and reasonable expenses,
including reasonable attorneys' fees, incurred by Executive, in connection with
the defense of, or as a result of any action or proceeding (or any appeal from
any action or proceeding) in which Executive is made or is threatened to be made
a party by reason of Executive's acts or omissions in the performance of her
services hereunder, if Executive acted in good faith and in a manner she
reasonably believed to be in or not opposed to the best interests of the
Company, regardless of whether such action or proceeding is one brought by or in
the right of the Company to procure a judgment in the Company's favor, or other
than by or in the right of the Company, provided that the Company shall have no
obligation to so indemnify Executive if it shall be determined by a court of
competent jurisdiction that Executive's actions were violations of either of the
Policies, or were felonies or illegal activities involving moral turpitude,
including, without limitation, dishonesty, fraud, and other business-related
crimes. The rights of Executive pursuant to this Section 13 shall be in addition
to and not in derogation of any other rights of indemnification, defense, or
being held harmless to which Executive may be entitled pursuant to law or
otherwise.
14. NO WAIVER. No failure or delay by either party in exercising any
right, option, power or privilege hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise thereof preclude any other or further
exercise thereof, or the exercise of any other right, option, power or
privilege.
15. AMENDMENT. This Agreement can only be amended, waived or terminated
by a writing signed by both the Company and Executive.
16. APPLICABLE LAW. This Agreement shall be governed by and construed
and interpreted in accordance with the internal law of the State of Texas,
without reference to its rules as to conflicts of law.
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17. HEADINGS. The section headings in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
The Company:
TRANS-CENTURY RESOURCES, INC.
By: /s/ X. X. Xxxxxxxxx
------------------------
Title: Chairman
Executive:
/s/ Xxxx X. Xxxxxxxxx
----------------------
Xxxx X. Xxxxxxxxx
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EXHIBIT A
BUSINESS PRACTICES POLICY
NEED FOR POLICY
Trans-Century Resources, Inc., maintains certain policies to guide its
employees with respect to standards of conduct expected in areas where improper
activities could damage the Company's reputation and otherwise result in serious
adverse consequences to the Company and to employees and consultants involved.
The purpose of this Policy is to affirm, in a comprehensive statement, required
standards of conduct and practices with respect to certain types of payments and
political contributions. Insensitivity to or disregard of the principles of this
Policy will be grounds for appropriate disciplinary action.
STATEMENT OF POLICY
PROHIBITION OF IMPROPER PAYMENTS
The Company expects all employees to use only legitimate practices in
commercial operations. As stated below, "kickbacks" or "bribes" intended to
induce or reward favorable buying decisions are unacceptable and prohibited.
No employee of the Company acting on the Company's behalf shall, in
violation of any applicable law, offer or make directly or indirectly through
any other person or firm, any payment of anything of value (in the form of
compensation, gift, contribution or otherwise) to any person or firm employed by
or acting for or on behalf of any customer, whether private or governmental, for
the purpose of inducing or rewarding any favorable action by the customer in any
commercial transaction; or any governmental entity, for the purpose of inducing
or rewarding action (or withholding of action) by a governmental entity in any
governmental matter;
In utilizing consultants, agents, sales representatives or other, the
Company will employ only reputable, qualified individuals or firms under
compensation arrangements which are reasonable in relation to the services
performed.
The provisions of this section are not intended to apply to ordinary
and reasonable business entertainment or gifts not of substantial value,
customary in local business relationships and not violative of law as applied in
that environment. When customer organizations, governmental agencies, or others
have published policies intended to provide guidance with respect to acceptance
of entertainment, gifts, or other business courtesies by their employees, such
policies shall be respected.
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RESPONSIBILITY AND AUTHORITY
MANAGEMENT RESPONSIBILITY AND CONSULTATION
Each cognizant manager is responsible for taking timely action,
including remedial action as may be necessary, in response to any matter which
arises under this Policy.
The manager will be expected to seek the counsel and guidance of higher
management as circumstances may require.
REPORTS
Any employee who acquires information (for example, newspaper reports,
reports from customers, or statements of individuals involved) that gives the
employee reason to believe that any employee or consultant to the company is
engaged in conduct forbidden by this Policy, or that any sales representative,
distributor or other person or firm representing the Company in any transaction
is engaged in the type of conduct (whether or not in connection with a
transaction involving the Company or its products) which, if engaged in by an
employee of the Company, would violate this Policy, will promptly report such
information to the employee's manager.
Any manager receiving a report as cited above will promptly report the
matter to higher management and thereafter will, after appropriate
investigation, take timely remedial or other action as warranted under the
provisions of this Policy.
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EXHIBIT B
EMPLOYEES' OUTSIDE BUSINESS INTERESTS POLICY
NEED FOR POLICY
In order to preserve the common corporate interests in continued
efficient and profitable operation and protect the Company's and its employees'
reputation for integrity, a statement of policy is needed to:
o define clearly the rights and responsibilities of Company
employees in their direct or indirect business relationships with
outside individuals, companies, and organizations;
o establish an effective procedure for disclosure of transactions
or situations in which there may be actual or potential conflicts
with the Company's interests; and
o assign responsibility and corresponding authority to determine
the propriety and appropriate disposition of any case of actual
or potential conflicts of interests which may be reported or
otherwise disclosed.
STATEMENT OF POLICY
It is the policy of Company to recognize and respect the right of its
employees to engage in outside financial, business or other activities which
they may deem proper and desirable provided that such outside activities are
legal, do not impair or interfere with the conscientious performance of Company
duties, do not involve the misuse of the Company's influence, facilities or
other resources, and do not reflect discredit upon the good name and reputation
of the Company.
Accordingly, for all business relationships with outside individuals,
companies, and organization and for all personal business undertakings, Company
employees should:
o act in accordance with the law, established Company standards,
and their own good consciences;
o consider the rights, interests and responsibilities of the
Company, the outside individuals, companies and organizations,
and themselves;
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o protect their own reputations and interests of the Company and
its controlled affiliates against actual or potential conflicting
interests with outside parties; and
o avoid personal transactions or situations in which their own
interests conflict or might be construed to conflict
with those of the Company or any of its controlled affiliates.
In this connection, every employee shall disclose promptly, in writing,
any personal situation or transaction which is or may be in conflict with the
intent of this Policy. Disclosures shall be made to immediate managers.
A copy of this Policy shall be given to each person engaged for, or
transferred to, a position in which the incumbent would influence: (1) the
conduct of Company business transactions, or (2) the custody, protection or use
of Company facilities, materials or other resources, including proprietary
information. Each such employee shall be requested to acknowledge in writing his
or her understanding of the Policy and to disclose at that time any personal
situation which is or may be in conflict therewith.
RESPONSIBILITY AND AUTHORITY
Responsibility, with commensurate authority for interpreting and
implementing the provisions of this Policy and for obtaining compliance, is
placed with individual managers.
RESERVATIONS OF AUTHORITY
Since acceptance by an employee of a position as an officer or director
of an outside business concern may entail important legal and business risks to
the Company and the individual involved, it is desirable that employees refrain
from accepting such positions except where the propriety of their participation
has been clearly established.
OUTSIDE BUSINESS IN WHICH POSITION AS OFFICER
OR DIRECTOR WILL BE HELD
o Corporations or other business organizations in which service of
a Company employee as an officer or director could reasonably be
interpreted by others as representation of Trans-Century
Resources, Inc. or could entail legal or other risks for the
company: Requires approval by the Board of Directors.
o Small local or family businesses in which service of a Company
employee could not reasonably be interpreted by others as
representation of Trans-Century Resources, Inc. or does not
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entail legal or other risks to the Company: Requires approval by
cognizant company officer or manager reporting to an officer with
the limitation that the approval authority must be one over one.
The individual approving the acceptance of a position as an officer or
director of an outside business concern should consider the desirability or
necessity of periodic reviews to determine whether continuance of the approval
is appropriate.
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